Appeal allowed due to lack of evidence in Central Excise duty case.

The appeal was allowed in favor of the appellant as the Member (Judicial) found that the Central Excise duty demand, based solely on a rough pad maintained by an individual without additional evidence, was not sufficient to prove clandestine removal of goods. The Department failed to provide corroborative evidence or conduct investigations with buyers to support their allegations. Without such evidence, the charges of clandestine removal could not be upheld. Therefore, the impugned order confirming the duty demand and penalties was set aside, and the appeal was allowed on 15.12.2017.

---

---

Issues:
Confirmation of Central Excise duty demand based on rough pad maintenance without sufficient evidence of clandestine removal of goods.

Analysis:
The appeal was directed against the order passed by the Commissioner (Appeals) concerning the Central Excise duty demand. The appellant, registered for manufacturing bio-pesticides and bio-fertilizers, faced allegations of not accounting for the production of bio-pesticides and clearing them under the guise of non-dutiable goods. The Department confirmed a duty demand of Rs. 99,089 along with penalties. The appellant argued that no incriminating records were found, and no adverse statements were recorded during the investigation. The appellant contended that without specific admittance by the appellant or its employee and buyers of the goods, charges of clandestine removal could not be upheld. The advocate cited various tribunal decisions supporting this argument.

The Department, represented by the DR, supported the findings in the impugned order. Upon hearing both sides and examining the case records, the Member (Judicial) observed that the adjudged demand was solely based on a rough pad maintained by an individual. The Department failed to provide additional evidence to prove clandestine manufacture and removal of goods. Moreover, no investigation was conducted with the buyers to confirm receipt of the alleged goods. The Member noted that charges of clandestine removal could not be sustained merely based on the rough pad and irregular maintenance of records. Citing the tribunal decisions, the Member concluded that without corroborative evidence regarding raw material purchase, final goods manufacture, money flow, or adverse statements from buyers, charges of clandestine removal could not be upheld.

In light of the above analysis, the Member found no merits in the impugned order. Consequently, the appeal was allowed in favor of the appellant, and the impugned order was set aside. The judgment was pronounced in open court on 15.12.2017.

---